Equity – Who do you work for?


I have always been one to consider the company I work for as “my company” in a sense that I’ve always treated their money as if it was my own.

This has a little bit of a moral compass about it and not for everyone but hey, we’re all different.

I’ve worked for employers in private and public companies, started my own business which I divested to work for employers again and invested in private businesses as a passive and non-passive shareholder and/or director.

From an ownership sense though, a company can only be your own when you own 100%; the moment you have partners the company is not yours.

I remember a conversation with the owner of a competing business years ago who was insistent that partnerships in business didn’t work and he had to always have 100% of the business so he could do what he wants. Isn’t control good enough?

I put this to a work colleague recently – “You have a business with a few shareholders of which some work in the business and some don’t. If you were one of the working shareholders would you consider that you were working for yourself since you owned the company?”

His answer was “yes” very quickly with the argument that he didn’t care how much percentage he owned of a company, he would consider that he owned the company.

So I put another question to him – “What happens if you as a shareholder don’t work in the business yet the shareholders working in the business decide to purchase a capital item worth $80,000 when the clear written agreement is that any capital item over $10,000 requires unanimous shareholder approval and when you question the process the answer is ‘it is my company and I have this benefit being my own boss’?”

A smile came over his face. “Good point”, he said.

How can you be your own boss with business partners and/or shareholders?

Isn’t your responsibility to all shareholders to follow corporate governance?

What’s stopping you from buying whatever you want with the company’s funds?

Most people going into business want to do so to “be their own boss”. A lot of people do not think about the fact once you have other shareholders you are working for them and that you can only be your own boss when you own 100% of the company.

It should feel good to the passive shareholders that they have partners with “skin in the game” working in the business keeping on top of things.

Either way, I am adamant that unless you do own 100% of a company then you do not “own your own company” and you work for the shareholders.

Having “control” of a company through majority equity or greater then 50% shareholding is a whole other topic; I’ll leave that for another thread as it is/can be a whole new beast.


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